SENSIO Technologies Inc.
TSX VENTURE : SIO

SENSIO Technologies Inc.

September 23, 2015 16:00 ET

SENSIO Releases its Results for the 2014-2015 Fiscal Year

Two Consecutive Years of Revenue Growth and Decrease in the Net Loss

MONTREAL, QUEBEC--(Marketwired - Sept. 23, 2015) - SENSIO Technologies Inc. ("SENSIO" / "the Company") (TSX VENTURE:SIO) today released its results for the fiscal year ended May 31, 2015. In the last fiscal year, the Company's revenues amounted to $1.39M, an increase of $686K or 97.3% over the previous year. Patent licensing revenues amounted to $1.23M, or 88.6% of overall revenues for the fiscal year, while revenues from 3DGO!™ remained relatively stable compared to fiscal 2014. Over the same period, the cost of sales and operating expenses decreased by $2.43M, or 41.8% which reduced the net loss for the year to $2.02M compared to $5.19M the previous year, a variance of $3.17M or 61.0%. A tight grip on operating costs and better management of activities related to the acquisition of 3D movie distribution rights are behind this significant reduction in expenses and in the net loss.

"The results for the 2014-2015 fiscal year reflect the efforts the Company has been making since 2013 to achieve a healthier financial performance while getting back on track towards growth," said Nicholas Routhier, President and CEO. "We have significantly reduced our cost of sales, more specifically expenses related to advances on royalties, as well as our operating expenses, in line with our plans and announcements. In terms of revenues, our patent licensing activities generated a significant portion of our revenues in 2015, which has allowed us to invest in the development and future growth of 3DGO!™. We expect this to pick up speed in the coming year and we believe that 2016 will see a significant turning point in the proportion of the revenues generated by 3DGO!™ out of the overall revenues of the Company."

"With the recent addition of Samsung and LG and the signing of 4 of the 6 MPAA "Motion Picture Association of America" studios, 3DGO!™ has become the most important 3D movie streaming distributor in the North American 3DTV market. In the coming year, we expect to be consolidating this position by signing new studios and adding new multimedia streaming devices, which are growing in popularity and use in North America. With these devices, we will be able to reach all 3DTVs in North America, whether connected or not and regardless of the brand. Finally, expansion into the European market remains a priority for SENSIO, given that more than 50M 3DTVs have already been sold on that continent and that we are currently working on a marketing plan in conjunction with our partners. We have made great progress in recent months, and the announcement of the European launch will be made when we find that all of the conditions necessary for its success are in place. Therefore we are very enthusiastic about prospects for growth in the next fiscal year."

Highlights of the Fiscal Year Ended May 31, 2015

  • Revenues increase of 97.3% during the last fiscal year compared to the previous year;
  • Decline in net loss of 61% and Operating expenses of 41.8% compared to the previous year;
  • Signature of an agreement with LG for the international deployment of 3DGO!™ on connected TVs equipped with CINEMA 3D technology and launch in the United States and Canada;
  • Signature of an agreement with Samsung for the international deployment of 3DGO!™ on 3D smart TVs sold since 2012;
  • Renewal and improvement of the distribution deals with Disney, Paramount and Universal;
  • Signature of an agreement by WiLAN related to SENSIO® S2D Switch;
  • New multi-year licensing partnership with WiLAN, which includes the temporal interpolation program for which three new patents were granted.

Consumer electronics market - Another year of growth

In the last fiscal year, activities in the consumer electronics market generated revenues of $1.30M compared to $611K the previous year, representing growth of $689K or 113%. The increase can be explained primarily by the new broader patent licence agreement inked with WiLAN in the second quarter and WiLAN's signing of a licence agreement for the SENSIO® S2D Switch. Meanwhile, revenues in this market in the fourth quarter amounted to $56K compared to $79K in the corresponding quarter a year earlier, reflecting the sluggish North American sales of 3DTVs.

As regards the intellectual property portfolio, the Company continued to make investments in the last fiscal year in order to strengthen its existing patent families and increase their commercial potential. These efforts led to the granting of 4 new patents, bringing the Company's patent portfolio to 19 issued and 10 pending in 11 distinct families. As announced in 2014, SENSIO created a second patent licensing program related to temporal interpolation which was part of the new agreement signed with WiLAN.

"We're satisfied with how our activities in the consumer electronics market performed this last year, especially given the slower 3DTV sales observed worldwide," commented Routhier. "Although less in the limelight, 3D functionality is still offered by the majority of manufacturers, who from now on are including it in most of their mid-to-high-end TVs, including 4KTVs, even the biggest ones. So the market is more limited but it's more focused on added value for consumers. Consequently, we expect a decrease in our revenues from technology licences in the market in the coming year."

"Nevertheless, the new agreement signed with WiLAN this year considerably broadened our revenue potential by adding new programs and new territories that are as yet untapped," Routhier went on to say. "Given the nature of patent licences, it's hard to predict when WiLAN may be signing new patent licence agreements this coming year, and we will have to be somewhat patient. We believe that revenues from the consumer electronics market will continue to play an important role for the Company in 2016 overall, but from now on we will have to count on 3DGO!™ for significant growth in the Company's revenues."

3DGO! - Return to growth in the fourth quarter

3DGO!™ revenues remained relatively stable during the year at $90.9K, compared to $94.2K the previous year. For the fourth quarter only, revenues from this service amounted to $31.0K, compared to $29.6K in the corresponding quarter of 2014. This is the first quarter of growth on a comparative annual basis after two consecutive quarters of decline caused by Vizio's discontinuing its 3DTV sales. The increase in the fourth quarter is primarily due to the launch with LG, the numerous improvements made to the service and the Company's marketing activities, which were begun at the end of March and have now started to bear fruit.

In the fourth quarter, the number of registered 3DGO!™ users continued to go up, from 23,363 to 28,112. This is an increase of 4,749 users over the period, compared to 1,729 in the third quarter of this year, and 2,040 in the fourth quarter of the previous year, representing improvements of 175% and 133% respectively. For the entire year, the number of users grew by 9,881, almost half of whom were added in the fourth quarter alone.

"The second year of 3DGO!™ operations was marked by significant upheaval in our operations and our performance," said Routhier. "Vizio's discontinuance of its 3DTV sales seriously undermined our efforts to recruit new users, and this was especially felt in the second and third quarters. We had to redouble our efforts in order to reverse the situation, either by signing new platforms, making improvements to the product and our customer service, obtaining new content, or with our marketing initiatives. In particular, we renewed our agreements with the major studios, adding new titles and new territories, re-encoded our film library to permit more robust distribution and to be universally compatible with all 3DTVs, signed and deployed with LG in Canada and the U.S. and started a marketing campaign in theatres."

"The turnaround in the fourth quarter is therefore not just a random occurrence, but rather a trend, which should be confirmed in the coming quarters, notwithstanding the expected slowdown in 3DTV sales," Routhier explained. ". We will most likely not achieve our objective of 50K users by the end of the first quarter but the improvement observed during the fourth quarter, not only in quantity but in quality of new registered users, has carried over during the first quarter of fiscal 2016. With the addition of titles from Fox, the recent deployment with Samsung, and the best list of movie releases in our history, including the blockbuster Jurassic World and the highly anticipated Star Wars: The Force Awakens, the fall and subsequent quarters are looking promising for 3DGO!™."

Selected Financial information

As at and for the year ended
May 31, May 31, May 31,
2015 2014 2013
Statements of Comprehensive Loss $ $ $
Revenues 1,391,067 704,908 392,356
Cost of sales 82,139 95,092 57,451
Impairment of advances on royalties 667,076 2,335,783 -
Total operating expenses 2,633,922 3,380,115 4,212,665
Net loss and comprehensive loss (2,023,324 ) (5,192,782 ) (3,862,998 )
Basic and diluted loss per share (0.02 ) (0.06 ) (0.06 )
Statements of Financial Position
Total assets 3,536,561 3,771,612 4,497,765
Non-current financial liabilities(1) - - -
(1) Non-current financial liabilities exclude deferred revenue and lease inducement of $157,605 in 2015 ($609,130 in 2014 and $823,192 in 2013)

For further information, please refer to financials statements and management and discussion analysis for the fiscal year on SENSIO's web site: www.sensio.tv

About SENSIO Technologies Inc. (SENSIO):

Founded in 1999, SENSIO Technologies Inc. (www.sensio.tv) is a pioneer in the field of stereoscopic 3D imaging and of 3D content distribution at home. For over 15 years, SENSIO has been developing, patenting and marketing advanced 3D image processing technology providing superior image quality as well as a simple user friendly experience. Its award-winning technology, SENSIO ® Hi-Fi 3D, can be found in millions of products for the cinema, distribution and consumer electronics markets worldwide.

Today, SENSIO uses its technologies and 3D expertise to deliver its video-on-demand service, 3DGO!, the first 3D-dedicated service offering Hollywood blockbuster movies directly to consumers. SENSIO works with some of the biggest brands in the consumer electronics industry and the film industry to become the destination of choice for 3D movie fans. 3DGO! aims to become the largest distributor of 3D content for the consumer market in the world.

SENSIO is listed on the Toronto TSX Venture Exchange (SIO).

Caution Concerning Forward-Looking Statements

Certain statements made in this press release that are not historical facts are forward-looking statements and are subject to important risks, uncertainties and assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. As a result, we cannot guarantee that any forward-looking statement will materialize and readers are cautioned not to place undue reliance on these forward looking statements. For more exhaustive information on these risks and uncertainties, the reader should refer to the risk factors described in the management's discussion and analysis of SENSIO for the year ended May 31, 2015. The forward-looking statements contained in this press release represent our expectations as of the date hereof. We disclaim any intention and assume no obligation to update or revise any forward-looking statements. Forward-looking statements are presented for the purpose of providing information about management's current expectations and plans and allowing investors and others to obtain a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SENSIO® is a registered trademark of SENSIO Technologies Inc

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